None Mr. King is employed as a plumber by MBV Services. Thisyear, Mr. King paid a $225 fee to renew his state-issuedplumber's license and $1,275 for supplies he uses on thejob. In the following case, compute Mr. King's after-taxcost of these employment-related expenses.Mr. King received no reimbursement from his employer.His AGI is $41,000, he itemizes deductions, and hismarginal tax rate is 15 percent.

Step 1: Define Itemized DeductionsItemized deductions are those expense items that an individual…

Answered: Mr. King is employed as a plumber by…

SWFT Comprehensive Vol 2020

43rd Edition

ISBN:9780357391723

Author:Maloney

Publisher:Maloney

Chapter4: Gross Income: Concepts And Inclusions

Section: Chapter Questions

Problem 42P

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Troy, a cash basis taxpayer, is employed by Eagle Corporation, also a cash basis taxpayer. Tray is a full-time employee of the corporation and receives a salary of 60,000 per year. He also receives a bonus equal to 10% of all collections from diems he serviced during the year. Determine the tax consequences of the following events to the corporation and to Troy: a. On December 31, 2019, Troy was visiting a customer. The customer gave Troy a 10,000 check payable to the corporation for appraisal services Troy performed during 2019. Troy did not deliver the check to the corporation until January 2020. b. The facts are the same as in part (a), except that the corporation is an accrual basis taxpayer and Troy deposited the check on December 31, but the bank did not add the deposit to the corporations account until January 2020. c. The facts are the same as in part (a), except that the customer told Troy to hold the check until January 2020 when the customer could make a bank deposit that would cover the check.
On July 20,2019, Kelli purchases office equipment at a cost of $12,000. Kelli elects out of bonus depreciation but makes the election to expense for 2019. She is selfemployed as an attorney, and, in 2019, her business has a net income of $6,000 before considering this election to expense. Kelli has no other income or expenses for the year. What is the maximum amount that Kelli may deduct for 2019 under the election to expense, assuming she elects to expense the entire $12,000 purchase? $24,000 $12,000 $6,000 $3,000 $1,000
Shanna, a calendar year and cash basis taxpayer, rents property to be used in her business from Janice. As part of the rental agreement, Shanna pays 8,400 rent on April 1, 2019, for the 12 months ending March 31, 2020. a. How much is Shannas deduction for rent expense in 2019? b. Assume the same facts, except that the 8,400 is for 24 months rent ending March 31, 2021. How much is Shannas deduction for rent expense in 2019?
Mr. King is employed as a plumber by MBV Services. This year, Mr. King paid a $225 fee to renew his state-issued plumber's license and $1,275 for supplies he uses on the job. In the following case, compute Mr. King's after-tax cost of these employment-related expenses. Mr. King received no reimbursement from his employer. His AGI is $41,000, he itemizes deductions, and his marginal tax rate is 15 percent.(general account)[02]
Clem is married and is a skilled carpenter. Clem's wife, Wanda, works part time as a substitute grade school teacher. Determine the amount of Clem's expenses that are deductible for AGI this year (if any) under the following independent circumstances: Note: Leave no answer blank. Enter zero if applicable. a. Clem is self-employed, and this year he incurred $830 in expenses for tools and supplies related to his job. Because neither was covered by a qualified health plan, Clem paid health insurance premiums of $5,490 to provide coverage for himself and Wanda (not through an exchange).What is the deductible amount for AGI? b. Clem and Wanda own a garage downtown that they rent to a local business for storage. This year they incurred expenses of $1,270 in utilities and $985 in depreciation.What is the deductible amount for AGI c. Clem paid self-employment tax of $17,600 (the employer portion is $8,800), and Wanda had $3,500 of Social Security taxes withheld from her pay.What is the…
Kyle, a single taxpayer, worked as a freelance software engineer for the first three months of 2021. During that time, he earned $44,000 of self-employment income. On April 1, 2021, Kyle took a job as a full-time software engineer with one of his former clients, Hoogle Incorporated From April through the end of the year, Kyle earned $178,000 in salary. What amount of FICA taxes (self-employment and employment related) does Kyle owe for the year?
Clem is married and is a skilled carpenter. Clem's wife, Wanda, works part time as a substitute grade school teacher. Determine the amount of Clem's expenses that are deductible for AGI this year (if any) under the following independent circumstances: Note: Leave no answer blank. Enter zero if applicable. a. Clem is self-employed, and this year he incurred $525 in expenses for tools and supplies related to his job. Because neither was covered by a qualified health plan, Clem paid health insurance premiums of $3,600 to provide coverage for himself and Wanda (not through an exchange). Deductible amount for AGI $ 525 ง
Jeremy is a calendar-year taxpayer who sometimes leases his business equipment to local organizations. He recorded the following receipts this year. Indicate the extent to which these payments are taxable income to Jeremy this year if Jeremy is (1) a cash-method taxpayer and (2) an accrual-method taxpayer. (Leave no answers blank. Enter zero if applicable.) b. $860 from the Ladies' Club for leasing the trailer from December of this year through March of next year ($215 per month). Income under cash method Income under accrual method
Kyle, a single taxpayer, worked as a freelance software engineer for the first three months of 2021. During that time, he earned $82,000 of self-employment income. On April 1, 2021, Kyle took a job as a full-time software engineer with one of his former clients, Hoogle Incorporated From April through the end of the year, Kyle earned $182,000 in salary.What amount of FICA taxes (self-employment and employment related) does Kyle owe for the year?
Jeremy is a calendar-year taxpayer who sometimes leases his business equipment to local organizations. He recorded the following receipts this year. Indicate the extent to which these payments are taxable income to Jeremy this year if Jeremy is (1) a cash-method taxpayer and (2) an accrual-method taxpayer. (Leave no answers blank. Enter zero if applicable.) c. $355 lease payment received from the Men's Club this year for renting Jeremy's trailer last year. Jeremy billed the club last year, but recently he determined that the Men's Club would never pay him, so he was surprised when he received the check. Income under cash method Income under accrual method
In January of year 0, Justin paid $9,400 for an insurance policy that covers his business property for accidents and casualties. Justin is a calendar-year taxpayer who uses the cash method of accounting. What amount of the insurance premium may Justin deduct in year 0 in each of the following alternative scenarios? Note: Leave no answers blank. Enter zero if applicable. a. The policy covers the business property from April 1 of year 0 through March 31 of year 1. b. The policy begins on February 1 of year 1 and extends through January 31 of year 2. c. Justin pays $10,600 for a 24-month policy that covers the business from April 1, year 0, through March 31, year 2. Note: Do not round intermediate calculations. d. Instead of paying an insurance premium, Justin pays $9,400 to rent his business property from April 1 of year 0 through March 31 of year 1.
Taxpayer operates a trucking business using the accrual method and reports on a calendar year. This year, Taxpayer signed a $50,000 binding contract with Complete Auto Repair. Under the contract, Complete Auto Repair will provide Taxpayer with up to 3,000 hours of vehicle repairs at $20 per hour. This year, Complete Auto Repair provided 300 hours of repair services and billed Taxpayer $6,000 for those services. At year-end, Taxpayer had not paid Complete Auto Repair for the services. Determine the amount Taxpayer may deduct for the repair services this year. If none, enter 0

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